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Ciena
Company Profile
Copyright 2020, Faulkner Information Services. All Rights Reserved.
Docid: 00021118
Publication Date: 2009
Report Type: VENDOR
Preview
Ciena – which bills itself as ‘The Network Specialist’ – is a data
networking company that manufactures, implements, and
services optical networking equipment and software for carrier-grade
networks.
Its open architecture approach combines many facets
of optical and packet networking with software and open interfaces. The
company
offers a portfolio based on Analytics and Intelligence, Control and Automation,
Programmable Infrastructure, and Services, with operations worldwide. This report looks at Ciena’s
operations in greater detail.
Report Contents:
Fast Facts
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Name: Ciena Corp.
Headquarters
7035 Ridge Road
Hanover, Maryland 21076
Phone: (410) 694-4500
(800) 921-1144
Fax: 410-694-5750
Web:
http://www.ciena.com/
Type of Vendor: Data Networking Service Provider
Founded: 1992
Employees: 7,000+ (2020)
Service Areas: US, with offices in 35 countries outside the US
Stock Symbol: CIEN (NYSE)
Profile
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Ciena bills itself as “The Network
Specialist.”
Related Faulkner Reports |
|
Optical Networking Market Trends Report |
The company is a US-based global supplier of telecommunications networking
equipment, software, and services to support delivery and transport of voice,
video, and data services. Its products are used in telecommunications networks
operated by telecom service providers, cable operators, government
agencies, and enterprises. In particular, Ciena provides equipment, software,
and services that support the transport, switching, aggregation, service
delivery, and management of voice, video, and data traffic on communications
networks. This technology allows network operators to adopt
software-programmable network infrastructure for on-demand services and
applications. Ciena’s operations include:
- Analytics and Intelligence
- Control and Automation
- Programmable Infrastructure
- Services
The company also maintains R&D centers in the US,
Canada, and India, as well as major field operations facilities worldwide in
countries such as the US, Canada, Mexico, Brazil, the UK, and Japan. Figure 1
shows Ciena’s overall presence, worldwide.
Figure 1. R&D (Pink) and Field Operations (Grey) Facilities
Source: Ciena
History
Ciena was founded in 1992 as a developer of optical networking technology
using DWDM (dense wave division multiplexing) at a time when most
telecommunications equipment vendors concentrated on technology such as frame
relay, ATM (asynchronous transfer mode), twisted-pair copper networking, and
SONET (synchronous optical networking) fiber optics. Some of the highlights of
Ciena’s brief history have included:
- 1997 – Launches its IPO, which is valued at $3.4 billion.
- 1998 – Introduces a 96-channel DWDM system for
transmitting signals across a single fiber pair. - 2001 – Reports sales totaling $1.6 billion with a market
capitalization of over $30 billion that is based on sales of a single DWDM
product … Acquires SONET supplier Cyras Systems. - 2002 – Acquires ONI Systems, a company that manufactures
metro optical transport and access systems. - 2003 – Purchases data networking company WaveSmith
Networks and SAN storage firm Akara. - 2004 – Begins branding itself as “The Network Specialist”
… Acquires broadband access system company Catena Networks and optical
Ethernet transport and switching manufacturer Internet Photonics. - 2008 – Purchases World Wide Packets, giving it access to carrier
Ethernet access and aggregation equipment, as well as networking software. - 2010 – Completes its acquisition of Nortel Networks’ MEN (Metro
Ethernet Networking) optical and carrier Ethernet business, which includes
both the product portfolio as well as a license to use the MEN name. - 2014 – Reaches a strategic agreement with Ericsson focused on
packet-optical distribution, converged IP/optical joint development and
distribution, and a SDN collaboration framework. - 2015 – Names former EMEA VP and GM Francois Locuh-Donou as COO …
Acquires Cyan, a provider of software and platforms for open and agile SDNs. - 2016 – Acquires TeraXion’s high-speed photonics component assets
for $32 million. - 2017 – Sees COO Francois Locoh-Donou vacate his position to join F5 Networks …
Introduces its Blue Planet Manage, Control and Plan software for network and
service management and planning … Reaches an agreement with TE SubCom to
further the advancement of open submarine cable networking. - 2018 – Reports plans to acquire DonRiver and Packet
Design to expand Blue Planet’s intelligent automation capabilities …
Introduces Intelligent Analytics Service, a cloud-based offering that
provides actionable intelligence to help create more agile and adaptive
networks. - 2019 – Unveils WaveLogic 5, a "coherent optics" product
to improve scale, programmability, and intelligence from network core to
edge … Enters into an agreement to acquire Centrina, a provider of service
assurance analytics and network performance management solutions. - 2020 – Sees Windstream build its National Converged Optical
Network using Ciena photonic, coherent optical, and intelligent software
platforms … Hires Mary Yang as SVP and Chief Strategy Officer … Works
with Arista to complete interoperability testing for dense 400GbE transport
technology with a high-density, native 400GbE router … Helps Comcast
deploy WaveLogic 5 Extreme and flexible grid technology to advance its
network and provide improved immersive digital experiences for customers …
Collaborates with Verizon and Juniper to test a Verizon live fiber network
capable of moving 800Gbps of data on a single wavelength … Sees AT&T
deploy a 400G optical connection to carry live Internet traffic across the
Ciena network.
Strategy
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Ciena’s strategy is to position its customers to "face an evolving future" by
offering a simplified network that is "ready to adapt, scale, and respond." The
company focuses on providing lean, automated, and open network solutions to
support business and residential services on a common, simple architecture.
Ciena’s infrastructure promotes differentiated services with the "speed and
performance your customers expect." Particular tenets of the Ciena strategy
include:
- Simplifying the network.
- Learning from successful network pioneers.
- Keeping traffic flowing freely at the network edge.
- Offering a "better and differentiated way."
Strengths
General areas of strength to which the company points include:
- Product functionality, speed, capacity, scalability, and performance.
- Relative cost.
- Strength of business relationships.
- Ability to offer comprehensive networking technology.
- Product development.
- Flexibility and openness of platforms.
- Manufacturing and lead-time capability.
- Services and support capability.
Vulnerabilities
Top risk factors include
- Competitive market for
communications networking equipment, software, and sales. - Pricing pressure, reduced demand, lower gross margins, and, ultimately, loss of
market share. - Increasing level of competition as multinational equipment vendors promote the adoption of competing
architectural approaches for “next-generation” networks and retain incumbent
positions with large customers worldwide. - Revenue fluctuation.
- Major US carriers AT&T (13 percent) and Verizon (11 percent), which
could struggle after the T-Mobile / Sprint merger, accounting for nearly a
quarter of its fiscal 2019 revenue base. - 10 largest customers accounting for 59.3 percent of sales.
Outlook
CIENA, amidst COVID-19-related market dynamics, has witnessed a shutdown in
orders that the company projects will likely "adversely impact [its] revenue for
a few quarters." According to President and CEO, Gary Smith, "We are confident
in our ability to continue executing on our strategy and expanding our market
leadership." In addition, specific "growth drivers" have included (and are expected to continue to
encompass):
- Optical Systems, through which it can address a range
of key applications. - Global Network, as part of
a multi-year transformation to improve delivery and expand
opportunity. - Packet Networking, to which it is adding IP
capabilities. - Software and Related Services, where
it is migrating customers to the Blue Planet network domain
controller platform. - Component Space, through which Ciena is working to
drive business development.
Product Lines
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Ciena’s product portfolio consists of Analytics and Intelligence, Control and
Automation, Programmable Infrastructure, and Services. This portfolio is detailed in Table 1.
| Products and Services | Description |
|---|---|
| Analytics and Intelligence |
|
| Control and Automation |
|
| Programmable Infrastructure |
|
| Services |
|
Competitors
Ciena competes in a strong market for communications
network solutions that is characterized by rapidly advancing technology, the
introduction of new networking products, and intense selling efforts. The
company’s top competitors are primarily large, multi-national companies such as
Cisco, Fujitsu, Huawei, Juniper, ZTE, and Nokia. Ciena also continues to compete
with several smaller, more-established companies that offer one or more products
that compete directly or indirectly with its own offerings.
- Cisco Systems: http://www.cisco.com/
- Fujitsu: http://www.fujitsu.com/global/
- Huawei: http://www.huawei.com/
- Juniper Networks: http://www.juniper.net/us/en/
- Nokia: http://company.nokia.com/en/
- ZTE: https://www.zteusa.com/
Activity
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Mergers, Acquisitions, and Divestitures
CIENA announced that it
has entered into a definitive agreement to acquire Centina, a
provider of service assurance analytics and network performance
management solutions. The acquired company’s assets will be
integrated into Blue Planet, a division of Ciena, where they will
be used to accelerate the company’s “software strategy of
providing closed-loop, intelligent automation solutions that help
communications service providers improve operational agility
while delivering a highly differentiated customer experience.”
Ciena claims this will greatly expand its ability to collect and
collate fault information from a wide variety of network types,
including virtual domains such as NFV as well as more traditional
optical, Ethernet and IP/MPLS networks and services. The
transaction is expected to close before the end of the 2019
calendar year. No financial terms were disclosed.
(10/03/2019)
Personnel and Organizational
CIENA announced the
appointment of Mary Yang as the company’s new Senior Vice
President and Chief Strategy Officer. The new exec will be
responsible for the company’s entire corporate strategy,
including the execution of development activities, mergers and
acquisitions, and related integrations. She will report directly
to Ciena President and CEO Gary B Smith. Prior to accepting the
new position at Ciena, Yang served most recently as vice
president of corporate and business development at NIO, designer
and developer of high-performance electric vehicles. The new exec
has also held senior leadership roles in strategy and corporate
development at leading communications companies, including
Fortinet, Cisco and Nortel.
(04/16/2020)
Financials
CIENA posted its
financial results for the third quarter of its 2020 fiscal year.
For the period, the company’s revenue reached $976.7 million, up
slightly from the $960.6 million posted for the same period in
2019. Net income for the quarter amounted to $142.27 million, a
vast improvement over the $86.75 million posted one year ago,
thanks to a combination of reduced operating expenses and
benefits from past acquisitions and integrations. The resulting
earnings per share were $0.92, compared to the EPS of $0.56
recorded for the year-ago quarter. Despite the growing profits
for the quarter, Ciena President and CEO Gary Smith did admit
that “COVID-related market dynamics have resulted in an orders
slowdown and are likely to adversely impact [Ciena’s] revenue for
a few quarters.”
(09/03/2020)
CIENA posted its
financial results for the fourth quarter and fiscal year 2019.
For the quarter, the company’s revenue totaled $968 million, up
markedly from Q4 2018’s total of $899.4 million. Net income for
the period was $80.3 million, or $0.51 per share, compared to the
$63.9 million, or $0.45 per share posted for the year-ago
quarter. For the year, Ciena’s revenue was $3.57 billion, a major
improvement over 2018’s total revenue of $3.09 billion. Net
income here was $253.4 million, a massive improvement over
2018’s net loss of $344 million, or $2.40 per share. It should be
noted that the year-ago results included a $493.5 million
provision for income tax charges that drove the results down for
the fiscal year.
(12/12/2019)
CIENA posted its
financial results for the third quarter of the 2019 fiscal year.
For the period, the company’s revenue reached $960.6 million, up
sharply from the $818.8 million posted for the year-ago quarter.
This drove net income to $86.7 million, up from the $50.4 million
posted for the same period in the previous year. The resulting
earnings per share grew to $0.55, compared to the $0.34 per share
posted a year ago. Also during the quarter, Ciena repurchased an
aggregate total of approximately 1.1 million of its own shares,
for a total purchase price of $45.4 million.
(09/05/2019)
About the Author
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Brady Hicks is an editor
with Faulkner Information Services. He writes about computer and networking
hardware, software, communications networks and equipment, and the Internet.
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